‘PROTECT USA’ Act challenges EU sustainability directive

The ‘PROTECT USA’ Act: US politics meets EU sustainability

A new bill in the US Senate is pushing back on the EU’s Corporate Sustainability Due Diligence Directive (CSDDD)—a development that could have ripple effects for companies operating across borders.

Senator Bill Hagerty has introduced the ‘Prevent Regulatory Overreach from Turning Essential Companies into Targets’ Act—better known as the ‘PROTECT USA’ Act—arguing that the CSDDD overreaches into US jurisdiction and amounts to foreign policy interference in American business.

What’s at stake?

The CSDDD doesn’t just apply to EU-headquartered companies. Non-EU businesses with over €450 million in turnover within the EU also fall within its scope. Current estimates suggest over 300 US-based multinationals could be directly affected—many more indirectly, through their supply chains.

Senator Hagerty's move appears to be a response to growing concern within the US political landscape. The Senate Banking Committee has already flagged the CSDDD’s potential consequences for US companies, especially those engaged in international trade with the EU.

Defiance: A bold stand against EU regulation, as US politics challenges Europe’s sustainability rules.

What the ‘PROTECT USA’ Act proposes

The bill seeks to shield US companies from compliance obligations under the CSDDD and similar foreign sustainability regulations. Key provisions include:

  • Sector exemptions: US companies operating in critical industries such as agriculture, mining, energy, timber, and manufacturing would not be compelled to follow the CSDDD

  • Legal immunity: US courts would be barred from recognising or enforcing foreign judgements based on sustainability regulations

  • Federal protections: The Act aims to prevent negative consequences for US companies—particularly those doing business with the federal government or considered strategically important—if they fail to comply with these foreign rules.

At its core, the bill is about reinforcing the principle that US companies should be bound by US laws, not external frameworks like the EU’s due diligence directive.

Why it matters

For now, the Act has only been introduced and is yet to be formally assigned to a Senate committee. But the political intent is clear: growing resistance in the US to extraterritorial regulatory frameworks like the CSDDD.

Even if your business is not directly in the line of fire, supply chain exposure could mean you're still affected. The outcome of this bill—and the broader US stance on the CSDDD—could shape the global regulatory environment in the months ahead.

Need help navigating the complexity?

We support companies in understanding and complying with global sustainability frameworks. From ESRS and materiality assessments to tailored reporting strategies, we help you turn regulation into clarity—aligned with your business model, sector, and goals.

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